Getting to a Public Option that Contains Costs: Negotiations, Opt-Outs and Triggers

The debate over a public option has essentially become a debate over the size and role of government in the health care system. The central argument, as we see it, should be one of fiscal conservatism—that a public option should play a role in addressing the very serious problem of health care cost containment. The current debate between the left and the right on this issue is obscuring the fact that consolidation in both the insurance and provider markets is propelling a higher rate of growth in health care costs. The consolidation of power, particularly in provider markets, makes it extremely difficult for insurers to negotiate rates for their services and contributes to rapid growth in health care costs. A strong public option is one that ties provider rates in some way to Medicare rates (though set at likely higher levels), and that is open to any individual or firm regardless of firm size. It would thus provide countervailing power to providers and help control cost growth.

We argue that a strong version is necessary because there is little else in health reform that can be counted on to contribute significantly to cost containment in the short term. Capping tax-exempt employer contributions to health insurance has great support among many analysts (including us), but it faces considerable political opposition. Proposals such as comparative effectiveness research, new payment approaches, medical homes and accountable care organizations, all offer promise but could take years to provide savings. Thus, the use of a strong public option to reduce government subsidy costs and as a cost containment device should be an essential part of the health reform debate.

We recognize that there is opposition to a strong public option. Both the House and Senate proposals are considering relatively weak versions to make the public option more acceptable. Both proposals would have the public option negotiate rates with physicians and hospitals. We see two problems with this. One is that negotiating rates is not simple and it raises difficult implementation issues; for example, with whom would the government negotiate? Further, negotiations are most likely to be unsuccessful with providers who have substantial market power. Since this is at the heart of the cost problem, a strategy of negotiations seems unlikely to be effective, as has been affirmed by cost estimates from the Congressional Budget Office.

The Senate has proposed a public option with an opt-out provision. This has the advantage of recognizing regional diversity in political philosophy by allowing states to pass legislation to keep it from being offered in their states. A disadvantage of this proposal is that it would exclude many who would potentially benefit from a public option. The states likely to opt out are likely to be those with high shares of low-income people and many uninsured.

The other alternative is to establish a strong public option but not implement it unless a triggering event occurred. The goal would be to allow the private insurance system to prove that it can control costs with a new set of insurance rules and state exchanges. The triggering events could be the level of premiums exceeding a certain percentage of family incomes or the growth in health care spending exceeding certain benchmarks. Since the public option would only be triggered because of excessive costs, however measured, we assume that a relatively strong version of a public option would come into play.

We recognize that taking a strong public option off the table may be necessary to enact reform legislation. But this will mean, at a minimum, higher government subsidy costs by not permitting a payer with substantial market power to bring cost containment pressure on the system. The outcome is likely to be that costs will continue to spiral upward. In effect, the nation would be relying on the range of promising pilot approaches to cost containment that would take some time to be successful. If they are not, we may be left with increasingly regulatory approaches, such as rate setting or utilization controls that apply to all payers. This would mean much more government involvement than giving people a choice of a low-cost public option that would be required to compete with private insurers.

I see these God-forsaken ads running on my blog about how people are supposed to “Stop Obama-care Now!” and I would like to metaphorically spit on this nonsense once and for all. Anyone attaching the misnomer of “socialized medicine” or using the phrase “Obama-care” at this stage has already labeled themselves as part of the partisan agenda weakening this country from within everyday.

I contend that if we witnessed these same bills moving through Congress proposed by Republicans instead of Democrats that many of the same harsh opponents of reform would flip-flop their stance entirely. Almost anyone questioned on their position in the media or otherwise states that they think there should be “some kind” of reform.

I am left to think that a vast majority of the resistance to the passage of these measures is simply playing politics on behalf of Republicans, in that if President Obama passes a successful humanitarian bill that enhances the lives of so many American families the political consequences to their party will be too severe to manage.

At least the televised and media punditry are motivated by this end, if noting else.

This “Party of No” mentality is dangerous to us all. If anyone has a valid objection or concern by all means they should make themselves known. But when a person simply stands on the legs of right wing talking points and shaky numbers I tend to think they would be a strong advocate for “McCain-care” if the universe where all flipped upside down.

Rusty Humphries is a disturbed individual. He sought to express to his audience today that for the first time since his wife passed away, a year ago, he felt as if tears would well up into his eyes. What caused him this moment of anguish and misery equal to the loss of a loved one? The images of recently released Guantanamo Bay terror suspects, referred to as “Uighurs,” to Bermuda.

One more radio pundit has lost his mind in the age of a return to American justice and the US Constitution being enacted under President Barack Obama. The partisan hate and ignorance of the fundamental values of American Democracy is disturbing and leads to only one conclusion: Rusty Humphries supports totalitarian-fascist policies for the U.S.

RUSTBUCKET: “These guys [Uighurs] had every intention of doing terrorist acts on China.”

One has to prove this in a court of law if you intend to detain any person. Innocent until proven guilty is a fundamental difference between American and Fascist Ideals.

RUSTBUCKET:“China has made it clear they will execute and make example of all terrorists.”

This is true. They are also a nation guilty of endless human rights atrocities. It is clear to me that this particular radio-jockey is a pro-fascist and anti-democratic pundit.

This is the U.S., not China.

Those who lose their country seek to protect the U.S. Constitution.

Those who love fascism seek to defend torture and detainment without trial.

His hatred for President Obama and all things American is so great, and so vastly partisan, that he continues to jeopardize and threaten the nation with his dangerous and unconstitutional rhetoric.

On Thursday, U.S. President Barack Obama delivered a strong defense of his decision to close the U.S. prison at Guantanamo Bay, an issue that has become increasingly political in recent weeks. On Wednesday, Congress had denied Obamas request for $80 million to close the detention facility.

In the speech, Obama largely repudiated the Bush administration policy on dealing with terror suspects — and declared again, in no uncertain terms, we do not torture.

Shayana Kadidal, a senior managing attorney at the Center for Constitutional Rights who has represented a number of Guantanamo detainees, joins Martin Savidge to discuss how the president made his case, the next step and potential pitfalls of the Obama plan.

Former President Bill Clinton can now be added to the list of big name Democrats that have eluded to or outright mentioned the Fairness Doctrine in radio-media.

I will boldly speak out turn and say now that there shall not a return to the arcane legislation of the Fairness Doctrine where an opposing opinion must be made time for after any political opinion is expressed.

Though John Kerry, Bill Clinton and other figures speak of a need for media regulation I think the issue was already addressed by President Obama when he requested that conservatives stray away from partisanship like that of The Radio Comedian Rush Limbaugh.

This is the clear stance of this administration that partisanship is any form is counter productive in politics. The partisanship found on FOX Network airwaves and conservative-talk radio was challenged thusly by the Executive Branch. I see no moves from this office toward this matter beyond what we have already witnessed.

This issue simply doesn’t rate high enough on the presidential ‘to do list.’ The outcries from the far right wing that this inane legislation from days gone by are paranoid delusions created to fabricate the image of ’persecuted’ conservatives.

The right to Freedom of Speech has always challenged Americans in terms of what they will accept in terms of their politics and their news media. Those like myself who have educated themselves on some aspects of modern media know about the Radio Fair and Equal Rule.

In the Fair and Equal Rule a political campaign that receives airtime must have due consideration and / or equal airtime.

I foresee no threat to the talk radio medium spreading further into FM, satellite and internet formats.

Though I also would not predict any ‘explosions’ of talk radio, but rather just a gradual integration. The Politic-Talk Medium will always remain, no matter what paranoid conservative pundits say.